Shocker! Entrepreneurs Often Are Not CEO Material. An entrepreneur who serves as CEO of a company he launched has found the two roles are very, very different.
By Murray Newlands Edited by Dan Bova
Our biggest sale — Get unlimited access to Entrepreneur.com at an unbeatable price. Use code SAVE50 at checkout.*
Claim Offer*Offer only available to new subscribers
Opinions expressed by Entrepreneur contributors are their own.
Though just 24 years old, Nadav Shoval has already launched five business ventures, including Spot.IM, , where he serves as CEO. Many of us assume an entrepreneur who has successfully launched a startup will thrive as a CEO but Nadav has learned the two roles require vastly different, and often incompatible, skill sets. He shared his insights on the different responsibilities and challenges each role presents.
What do you believe is the biggest misconception about the entrepreneur turned CEO?
It may sound provocative to say this, but entrepreneurs are not CEOs-in-waiting. We need to stop thinking of them that way if we want to build truly successful and, above all, sustainable companies. We like to think of the great product developer or disruptive innovator as just the precursor to being the head of a hugely successful company. But the truth of the matter is, there are marked and critical differences between being a successful entrepreneur and a successful CEO. Sometimes, they even require quite opposite or contrasting skill sets.
Related: 3 Things to Do If You Want to Become a CEO by Age 30
What are the main responsibilities of being an entrepreneur? What about a CEO?
An entrepreneur acts as a hugely powerful engine for disruption and change. That's incredibly valuable, especially at the start of a project. At this point, success is based on identifying a problem to solve, quickly creating a solution to fill that need and then convincing potential investors, partners, employees and users/customers that the solution will work.
But a CEO has to be a vehicle for sustainable success. If you're leading a company it's simply not enough to just be the engine. That might get the journey started but provides no guarantees of getting to your destination in one piece, if at all. What's key to a CEO's success, and what can actually be inimical to an entrepreneur's creativity, is structure. A CEO has to provide the working infrastructure around different hubs or engines of creativity, if they want to do their job well. It's less about providing the power, and more about harnessing it for a larger purpose or goal.
For a CEO, milk matters, whereas for an entrepreneur, it doesn't have to. What I mean by that is that a CEO has to worry about small, seemingly minor matters that an entrepreneur has the luxury to ignore. A CEO has to worry that their company has a health insurance and pension system in place, that there is a clear policy on sick days, vacation, and bonuses and perhaps most significantly, that there is milk in the fridge for everyone's morning coffee. There are dozens of unexciting logistical and administrative issues that come under a CEOs purview (even if someone else is doing the actual work). That might frustrate an entrepreneur who wants to be free to focus on the product.
Related: 5 Influential CEOs Weigh in What Makes a Good Leader
Can an entrepreneur also succeed at being a CEO?
When we think of archetypal entrepreneur-CEOs, we think immediately of their brilliance and talent for design and innovation, and despite what I've said above, there are of course some entrepreneurs who also make for great CEOs. But for many of us, brilliance or genius can sometimes conflict with being the person every employee in a company can trust to lead them.
If an entrepreneur needs enough genius to see something no one else can, the role of the CEO is actually not necessarily to be the smartest person in the room. The key to being an effective CEO is identifying and channeling the genius of others and understanding how to apply it with the wider interests of the company in mind.
Related: Memo to Entrepreneur: You're Not the Smartest One in the Room
How else do entrepreneurs and CEOs differ?
In the same vein, another key difference between an entrepreneur and CEO lies in their primary function. An entrepreneur needs to create a product or service. The onus is on them to create the "something from nothing" / ex nihilo idea that gets the process started.
But a CEO can't focus solely on getting things started because, as I said above, they need to provide the infrastructure for longer term success. In that sense, a CEO has to be more of an editor than a creator. His job is knowing when and what to cut away from new ideas to shape them (and the company) into the form that will ensure the highest chances for success.
How do entrepreneurs and CEOs fit into the overall business structure?
If an entrepreneur needs to insist on doing things his way, (which may often, to be fair, be the most effective way to do something), a CEO has to accept his way may not always be the right way.
Within the framework of a larger company, any given situation will require different standards and ways of doing things. One project may require efficiency to drive the pace, while another perfection, and success lies in knowing the difference and being flexible enough to adapt. Even more, it means recognizing that different colleagues are going to bring different perspectives and approaches. Learning to trust their expertise and decision-making, even when you might do things differently, can be critical.
An entrepreneur can afford to have tunnel vision. Focusing all of their attention on the opportunity they see in front of them is critical for their success. But, to continue the metaphor, a CEO needs to have double vision. They need to be able to see both the opportunities for growth and the obstacles that lie in the way of that growth. If they can't employ this kind of preemptive problem solving, they will inevitably fall into every pitfall that crosses their path, and while that may work for a time for an entrepreneur, for a CEO responsible for a whole company, those are setbacks you can ill-afford.
